I know you deficit hawks are going to disagree but let's be honest. It does nothing but add stress to government employees such as custodians and food service workers when politicians argue over it. It is raised every single year so what's the point? The government would still spend a crazy amount of money even in the scenario of a default
Actual government employees receive back pay. Not so for those employed by contractors and that includes most food service workers and building custodians. When the government shuts down, contractors and their employees pay a steep price
Forgive me for being cynical, but the last time this subject came up was when Obama lost the House of Representatives, and now it’s coming up again when Biden has lost the House of Representatives. This seems oddly similar to the debate on “filibuster reform.” That only seems to come up when the Democrats have control of the Senate and never when they don’t. The joy and pain of checks and balances is that they work both ways. The debt ceiling is such a check that gives the House by design some leverage in negotiations with the Senate and President. I don’t like it when the government shuts down anymore than anyone else, but neither Party enjoys its either. It is, however, the only real counterleverage against the House to make sure the majority party is being reasonable in negotiations. Is that how it always works? Of course not. But I would not strip the House of one of its few actual powers remaining to it.
Sorry but I hear this discussion every time Congress has to consider it. That is post Obama. If it were only politics I'd say let it stay. In 2023 I look forward to the GOP's discussions on cuts to Medicare. I also disagree that it is the only counter leverage the House has. Ever heard of a real budget? How about creating a real budget with specific spending and borrowing rules and stop kicking the can down the road every year.
I meant counterleverage to the House from the Senate and/or President if it gets intransigent about refusing to raise the debt ceiling. The House has a couple of unique powers, but not as many as the Senate. And one of them, that all matters requiring new spending must originate in the House, has been proven time and again to not really be a thing.
When you consider what it is, and what it isn’t, it doesn’t make a ton of sense. The budgets have already been passed. The money appropriated and in some cases as in 3rd party contractors the work may have already been done. We have already decided all of those things, will two elected congressional bodies and a president involved. There is plenty of balance. Having a debt ceiling is just a mechanism where we can essentially choose to default on existing obligations. You can argue the brinksmanship over it gives one side or the other leverage, but that comes at a pretty high cost, the full faith and solvency of our federal government. I suspect eventually we will do it once, the consequences will be pretty bad, and that will be the last time we do it. Maybe we have to touch that hot stove to really learn.
Could they not put a provision in every new annual budget bill to raise the debt ceiling to take care of that particular budget?
As a gov employee, i could care less. The only thing that it hurts is our customer (in my case the military as we cant award new contracts until the new FY budget is passed.)
Very skewed article, but it’s from NBC so what do you expect. I will grant you that private contractors at government facilities MAY not get paid but the majority do as most contractors will operate on their own knowing they will get paid upon delivery
What happens is those contractors that still have money in the coffers (IE money not yet spent at the end of the year) will continue to work until the coffers run out. They may cut back on the amount of hours but they will always continue with business as long as project has the money.
That is not at all how private companies typically work. They don’t work until the “coffers” run out and then stop. Whether they continue to work or not probably depends on the nature of their contract and the nature of the work and their expectation whether or not the situation will resolve and they will get paid for the interim work. There are times where companies furlough employees based upon shutdowns.
There are also government workers who can’t afford to miss paychecks. Sure, they’ll get paid eventually but younger workers don’t typically have that buffer. Of course I’m always hoping for a government shutdown. The longer the better.
Very true. If the contractor is performing a fixed price contract they will most likely do whatever they can, including short term loans to keep going to avoid increased costs due to inefficient schedule and/or furlough/layoff costs. If they are on a cost plus or T&M contract, then what they do will largely be based on the terms of their contract. Most contractors have wised up over the last 10-15 years, with the multiple shutdowns, and put protections in place before signing contracts.
For clarity, a government shutdown, and a debt limit induced default are 2 different things. A shutdown cause a relatively limited number of discretionary activities to be put on hold. A debt limit default means the government only has funding of about 75-80%, on average to fund expenses. The two major problems it presents is 1. Temporarily cutting government spending by 25% is approximately reducing GDP by 5%, not including multiplier effects which make it worse. It could easily throw the economy into a recession if not resolved. 2. Even though they can still pay for 75-80% of expenditures, it isn’t really clear if there is a legal methodology or workable one to pick and choose what bills to pay. Does congress or the treasury have to authority to say we will pay debt and social security and Medicare but not other things? I’m not sure this has been resolved. Plus the government is not like a mom and pop company with two AP clerks that can manually decide what gets paid and what doesn’t. This stuff is all automated. It isn’t obvious how you turn it off and manually override it.
Booze Allen Hamilton does. They stop work on contracts once the money runs out. Of course Booze Allen Hamilton has more than government contracts.
